Think back 10+ years ago, and what did outsourcing really mean? Saving money, if we’re completely honest about it. Nothing wrong with cutting costs, of course. All other things being equal, cost savings drop straight to the bottom line.
Except when it doesn’t.
What the outsourcing movement proved was that savings were an illusion. Costs per service transaction were reduced, but companies gave it back as customers switched vendors in search of better service.
Jeffrey Puritt, President and CEO of TELUS International (an outsourcing arm of Canadian telecom firm TELUS), says “savings is a red herring.” What companies should be doing is “focus on building a great experience.” High-quality support is a key factor, Puritt contents, in TELUS’ life time customer value of $10,000 — double its nearest competitor.
Outsourcing 1.0
In CustomerThink’s 2006 global Customer Experience (CX) study, we explored how consumers and enterprises believed different initiatives impacted customer experiences. We found a significant number of customers said off-shore call centers (38 percent) and IVRs (35 percent) had adverse effects.
Subtracting negative from positive ratings resulted in the “net agreement” scores you see below. A positive score indicates that the initiative does more good than harm. Conversely, a negative score means that the initiative had a net negative impact on customer experiences, and potentially reduced customer loyalty.
Customer and enterprise respondents were in directional agreement, giving net negative ratings to off-shoring and IVRs and net positive ratings to Internet sales/support and employee training. However, it appears that enterprise respondents were not in synch with customers as to the magnitude of the ratings for off-shoring, IVR, and training.
This is old news now, but worth mentioning because the question I want to explore now is: Can today’s Business Process Outsource (BPO) firms help your company be more customer-centric?
Outsourcing 2.0
The BPO industry is massive — worth $150 Billion in the US alone — including big players like Accenture and HCL, specialty firms, and many regional providers. If you want to outsource some part of your operations, including people, processes, and technology, odds are you can find a firm to handle it.
What’s different now is the result of the CX movement of the past decade, which puts a higher value on customer loyalty. Jeremy Watkin of Oregon-based outsourcer FCR, says:
Outsourcers are most certainly beginning to understand the essential role they play in the greater customer experience of their clients. Simply responding to customers, hitting SLA goals, and maintaining quality standards is no longer enough.
Understanding the CX priority is a start, but are BPOs really prepared to execute? According to contact center industry veteran Bill Price, now a partner at Antuit, not so much:
Every BPO is now talking CX but it’s hard for them to do much since few BPO firms handle all of the support, none build the knowledge systems, and few have the chops. Therefore, it rings hollow to most clients, even as they welcome the attention on the topic.
That weakness, which I believe stems from the cost-centric heritage of many BPO firms, is an opening for TELUS International. Because its roots are deep in TELUS — one of the most customer-centric firms I’ve come across in 20 years of research.
TELUS International officially launched in 2005, and now serve much of TELUS as its largest customer. Puritt, a veteran of TELUS since 2001, became president of the BPO arm in 2008. Since then, it’s grown into a global operation with 25,000 employees supporting multi-channel customer interactions.
Ideal clients are, as you might expect, technology, hospitality and other firms that are focused on experiences as a differentiator. Puritt can leverage TELUS’ decades of learning and an engaged workforce to upgrade service levels for its clients.
My take: some firms struggling to get out of their own way in CX execution might find a customer-centric BPO helpful to accelerate change and leapfrog competitors.
High Tech or High Touch? Why Not Both!
Despite waves of innovative self-service technology over the past 20 years, customers still like to talk to a human. A 2016 Accenture study found that “83% of U.S. consumers prefer dealing with human beings over digital channels to solve customer services issues.” Furthermore, the research revealed $1.6 trillion (yes, with a “T”) lost by brands because of customers switching due to poor service.
At the very least customers should be able to talk to human as a “plan B, ” says Puritt, if technology-based service doesn’t work.
But there’s more to it than that. People can be empathetic, and human interactions are much more likely to create lasting memories. CustomerThink research has found about 70% of memorable experiences are created with human interactions. Automated service is necessary for efficiency, but after the novelty wears off, it becomes a utility-like expectation, leaving little upside for customer delight.
This is the key issue for CX designers — and a job that should not be outsourced. How will you design a signature experience that brings together the best of man and machine? The goal is to deliver memorable experiences on touchpoints that truly matter, and automate routine interactions. Puritt acknowledges that situations, demographics and individual preferences can dictate whether high tech or high touch is the right approach. The key is to offer a choice, and be prepared to execute either way.
Pressure to reduce costs is not going to let up. In the CX era, progressive executives will recognize that superior service is a gift that keeps on giving, and will find outsourcers that work as partners in that strategy.
